Brazilian Farmers Beat Monsanto

Five million Brazilian farmers have sued Monsanto for in excess of 6 billion euros, accusing the company of collecting royalties on crops it unfairly claims is the property of Monsanto.

The farmers challenged Monsanto’s practice of collecting royalties on seed harvests using seeds from the previous year’s crops.

But because of Monsanto patented seed creations, the company charges an initial royalty on the sale of the crop produced, and a continuing royalty on every subsequent crop in perpetuity, even if the farmer is using a later generation of seed.

QW Magazine reports that in April, a judge in the southern Brazilian state of Rio Grande do Sul, ruled in favor of the farmers and ordered Monsanto to return royalties paid since 2004 or a minimum of $2 billion.

The ruling stated that the business practices of seed multinational Monsanto violated the rules of the Brazilian Cultivars Act.

Monsanto has filed an appeal against the judge’s order and a federal court ruling on the case is now expected by 2014.

Farmers contend the seeds they used to plant crops were produced many generations after the initial genetically modified seeds they obtained from Monsanto, and claim Monsanto is unfairly collecting exorbitant profits every year worldwide on royalties from “renewal” seed harvests.

Renewal crops are those that have been planted using seed from the previous year’s harvest. Monsanto disputed the farmers’ claims and has demanded royalties from any crop generation produced from its genetically-engineered seed.

Monsanto not only charges an initial royalty on the sale of the crop produced, but a continuing two percent royalty on every subsequent crop, even if the farmer is using a later generation of seed.

The Center for Food Safety, which has sued over USDA approvals of biotech crops, referred to the bill as a “Monsanto profit assurance provision that interferes with judicial oversight of agency decisions and has the potential to disrupt the global grain trade”.

“The bill would empower a single corporation and a few of its industry friends to move beyond the control of the U.S. courts, USDA and public review to make their own rules and profit from slippery back door politics,” Andrew Kimbrell, executive director of the center, said in a statement.

The USDA’s approval of Roundup Ready alfalfa was overturned in 2007 by a U.S. District Judge who also banned further plantings pending the completion of a more rigorous environmental impact statement.

However, in 2010, the U.S. Supreme Court overturned the planting ban and the USDA re-approved the crop the following year.